Crude oil prices jump as US-Iran war escalates; Brent oil tops $90 per barrel

US-Iran war: Oil prices surged over 4% on Monday, with Brent crude crossing the $90-per-barrel mark, after the United States and Iran intensified their attacks in the Middle East, raising concerns over energy supplies through the Strait of Hormuz.

Brent crude futures rose $2.69, or 4%, to $90.79 a barrel, their highest level since June 11. The benchmark extended last week's rally, during which it gained 15.9%—its biggest weekly increase since April.

Meanwhile, US West Texas Intermediate (WTI) crude climbed $2.19, or 2.65%, to $84.68 a barrel, its highest level since June 12. WTI had advanced 15.5% last week, marking its strongest weekly gain since early March.

Iran said its ceasefire with the United States had effectively broken down, increasing fears of further disruptions to energy shipments through the Strait of Hormuz.

The US carried out its ninth straight night of airstrikes on Iran, saying the operations were aimed at weakening military capabilities allegedly used to target commercial vessels and civilian mariners, according to US Central Command. Meanwhile, Kuwait said it intercepted Iranian drone attacks.

Iran's Navy was quoted as saying by Bloomberg that it stopped four unidentified vessels attempting to pass through the Strait of Hormuz via an "unsafe route" after they ignored repeated warnings. Two vessels were reportedly disabled following accidents, while the remaining two turned back.

Separately, the UK Maritime Trade Operations (UKMTO) said military authorities had reported a vessel on fire northwest of Kumzar, Oman, although the cause of the incident has not yet been confirmed, according to Bloomberg.

A week of escalating exchanges between Iran and the US has expanded beyond military sites to include infrastructure such as bridges, utilities, and port facilities, dimming hopes for a return to the fragile ceasefire. Kuwait Petroleum Corp. said an Iranian strike on Saturday caused significant damage to one of its oil facilities.

Iran-backed Houthi militants in Yemen have also intensified concerns by disrupting commercial shipping through the Red Sea during periods of heightened regional tensions. Last week, the group's leader threatened attacks on Saudi oil infrastructure after launching ballistic missiles and drones toward the kingdom.

The worsening conflict has heightened worries over global oil supply disruptions. According to JPMorgan Chase & Co., global oil inventories outside China are at record lows, leaving the market with very limited buffers against any supply shock.

Kuwait was among the countries most affected by Iran's retaliatory attacks over the weekend, while Bahrain was also targeted. Israel said it intercepted an Iranian drone near its border with Syria, and Iranian media reported that US forces struck Qeshm Island in the Persian Gulf, along with southern cities including Shadegan.

The US has also resumed efforts to restrict movement through the Strait of Hormuz, while Iran's attacks on vessels in and around the strategic waterway have threatened the "shuttle run" operations used by Persian Gulf oil producers to transport crude cargoes.

Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.

Vaamanaa covers business and stock market news. Started in 2020, she has been producing news on digital platforms for over 4.5 years now. She writes on markets, commodities, IPOs, and industry. She has worked for news channels like Jagran New Media and Business Insider India. You can reach out to her at vaamanaa.sethi@htdigital.in.

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